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August 9, 2008

Vietnam’s central bank:
No more joint stock bank licenses

Vietnam’s central bank will stop licensing the operation of new joint stock banks while adjusting regulations on the establishment of domestic banks, said Reuters on Friday.

Vietnam’s government on July 29 has asked the State Bank of Vietnam to make appropriate regulations on new banks in accordance with a government document.

“While the new criteria are not published, the establishment of new commercial joint stock banks is temporarily put on hold,” the central bank’s statement said, without elaborating.

Vietnam, where about 10 percent of its 86.5 million people have bank accounts, has 37 joint stock banks, part of them owned by private companies and individuals.

The central bank of Vietnam said it had received more than 20 applications to establish banks, but only two have been licensed and started operation while Vietnam has been tightening its credit growth this year to fight inflation.

On the other hand, the government has told state-owned corporations to focus on their core businesses instead of spreading investment in various fields from real estate to banking.

Last month, state oil monopoly Petrovietnam said it had decided to withdraw interest in contributing funds to establish Hong Viet Bank, following the government’s guidance.

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